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The Union Budget 2025 raises TDS thresholds for dividends, lottery winnings, commissions, rent, and interest from 1st April 2025, benefiting individuals and reducing compliance burdens.
New TDS Rules From April 01
New Income Tax Rules From April 2025: New changes in TDS (Tax Deducted at Source) as announced in the Union Budget 2025 will become effective from 1st April 2025. Increasing the threshold for dividends, lottery winnings, commissions or brokerage, transfer of virtual digital assets, rent, and fees for professional or technical services will directly affect individuals.
CA and Advocate Kinjal Bhuta, secretary, Bombay Chartered Accountants’ Society said that the Union Budget 2025 had made a lot of upward changes in thresholds of applicability of TDS, and those changes shall be effective from 1st April 2025.
“The change in TDS threshold on dividend income from Rs.5000/- to Rs.10000/- is beneficial to those individuals who are investing in less amount in security market,” Kinjal said. Likewise, for the corporates also it may reduce the compliance burden and is beneficial to an extent.
Another significant change has been income from winning in lotteries, games, horse races etc., where earlier the threshold was Rs.10,000/- for such income earned in the entire financial year, now that has been liberalised to Rs.10,000/- for every transaction.
Kinjal said that this shall be especially beneficial to online gamers whose earnings per transaction are lesser; they shall avoid getting their tax deducted. Further, for the online gaming industry, which is growing in India in recent years, the compliance and complexity of TDS deduction shall reduce considerably.
One of the significant changes for senior citizens, where TDS on interest on other securities like bank FDs, bank interest etc. shall be applicable only if such interest is more than Rs.1 lakh as against the previous limit of Rs.50,000/-.
Kinjal highlighted that the limit has been increased to double and will cover a lot of senior citizens having interest in this range. The increase in the range of TDS shall also indirectly reduce the return filing compliance for many senior citizens who used to file their returns just to claim the refunds because of TDS deducted on interest income.
Full Changes Of TDS From 1st April 2025:Â
| Section No. | Income | Existing Threshold | Revised threshold w.e.f 01st April 2025 |
| TDS PROVISIONS | |||
| 193 | Interest on securities | Rs. 5,000 | Rs. 10,000 |
| 194 | Dividends | Rs. 5,000 | Rs. 10,000 |
| 194A | Interest other than interest on securities (other than senior citizens) – if payer is banking company, co-op society engaged in business of banking or post office | Rs. 40,000 | Rs. 50,000 |
| In any other case | Rs. 5,000 | Rs. 10,000 | |
| In case of senior citizens | Rs. 50,000 | Rs. 1,00,000 | |
| 194B | Winnings from lotteries, crosswords, puzzles, etc | Rs.10,000 during FY | Rs.10,000 for single transaction |
| 194BB | Winnings from horse racing | Rs.10,000 during FY | Rs.10,000 for single transaction |
| 194D | Insurance commission | Rs. 15,000 | Rs. 20,000 |
| 194G | Sale of lottery tickets | Rs. 15,000 | Rs. 20,000 |
| 194H | Commission or brokerage | Rs. 15,000 | Rs. 20,000 |
| 194I | Rent | Rs.2,40,000 in a financial year | Rs. 50,000 for a month or part of a month |
| 194J | Fees for professional or technical services | Rs. 30,000 during financial year | Rs. 50,000 during a month |
| 194K | Income in respect of units | Rs. 5,000 | Rs. 10,000 |
| 194LA | Payment of compensation on acquisition of certain immovable property | Rs. 2,50,000 | Rs. 5,00,000 |
| 194LBC | Income in respect of investment in securitisation trust- | 25% | |
| Individual or HUF | |||
| Others | 30% | 10% | |
| 194S | Transfer of Virtual Digital Asset | Sub-section (2) of said section provides that the provisions of sections 203A and 206AB shall not apply to a specified person | Omission of this reference |
| 206AB &206CCA | Special provision for deduction of tax at source for non-filers of income tax return | Higher of – | Omitted |
| 1.      Twice of rate specified in relevant section | |||
| 2.      Twice of rates in force | |||
| 3.      5% | |||